Over the year to the end of January 2016 Baillie Gifford Shin Nippon’s net asset value per share (after deducting borrowings at fair value) rose 25.4%, whilst the comparative index, MSCI Japan Small Cap Index (total return in sterling terms), rose by 10.9% in sterling terms. The share price increased by 39.6%.
The manager says, noticeable among the positive contributors to performance over the year were a number of disruptive online businesses targeting the domestic market. Istyle, owner of Cosme.com, has seen strong growth in sales and profits as its cosmetics rating model has gained traction with a number of leading brands. It is now replicating this model in China where initial progress has been encouraging. Next is extending its advantage in the online real estate sector by expanding the range of services it delivers through its online platform. Sales and profit growth at MonotaRO remain at high levels as the company continues to take share from offline suppliers of maintenance and repair equipment. Precision surgical guidewire maker Asahi Intecc is enjoying rising demand for its new generation of products especially from overseas customers.
Company specific issues have led to poor performance from some names. Sales and profit growth at medical data management software provider Findex have suffered due to issues with its sales partners. The company is working actively to resolve what we believe to be a short term problem that should be easily fixed. Crowdworks, a crowd sourcing services provider, is gaining traction with customers across sectors but also remains loss making as it continues to invest in building its brand and scale of operations.
BGS : 2015 a great year for Baillie Gifford Shin Nippon